Sale would mean the end to cash flow
Thoughts from a 78 year old rural banker: If I were one of the 14,500 stockholders of Farm Credit Services of America, I think I would really be uptight being a stockholder and not being informed on the sale. Our bank has 38 stockholders with 3rd and 4th generations. Could I or should I sell them down the river without them being informed? Their ownership since 1891 was dedicated to having an agriculture bank. Selling our business would suggest we do not have the ability to run the place. It may imply Wells Fargo or other large financial institutions would do better. Six other banks in Thayer County and banks in the surrounding area have the same priorities that we do in serving agriculture. If one bank cannot meet the need there is another down the road. These banks, in concert with friends in other banks, can handle any loan in agriculture.
I also compare the sale to a dad saying to his sons, "Boys, agriculture is really getting big and complex. I am going to sell the farm to a large agribusiness; they can serve the community better." So the money is distributed and the cash flow is gone forever.
Granted Farm Credit is our leading competitor. Banks ask only one thing, let them pay taxes like private enterprise if they want to mirror banks. This would create a level playing field. Farm Credit in the 1930s was very instrumental in keeping some land in the borrowers' hands by letting them stay on by paying rent only for a time, which was their original mission and purpose. In the '80s and '90s the trend changed some because they did not have the financial strength to do it. Farm Credit said the sale is necessary to enable them to make commercial and residential loans in larger communities. Does that serve agriculture and even if it does, Rabobank would benefit because Farm Credit and its stockholders are gone?
It is interesting Chrysler and Japanese cars are dominating the scene. The steel business seems to have gone to China, clothing industry to Taiwan, manufacturing to Mexico, and the chemical industry to Switzerland. Are we selling America piece by piece? The foreign countries have a lot of our dollars now.
You can bet the distribution to stockholders of Farm Credit will be the last dividends to them. The money and control of our country seems to be going overseas. I would also suggest the stockholders look at the price, too. A good bank in Nebraska would sell at 2 to 2.5 times its book value. Is Farm Credit selling only for book price?
Stockholders, think about it!
--Frank Bruning, Bruning, Neb.